AusGroup swings to A$1.1m Q2 profit from A$69.8m year-ago loss, expects to remain profitable

AusGroup has sold its Singapore fabrication facilities at 36 Tuas Road.
AusGroup has sold its Singapore fabrication facilities at 36 Tuas Road. PHOTO: AUSGROUP

SINGAPORE - Mainboard-listed AusGroup returned to the black in its second quarter, with a net profit of A$1.1 million (S$1.8 million) for the three months to Dec 31, 2016, from a net loss of A$69.8 million a year ago.

Revenue in the quarter fell 13.5 per cent to A$106.3 million from a year ago, mainly due to the completion of a key contract in the maintenance business in the fiscal third quarter of FY2016.

The closure of its Singapore fabrication and manufacturing facility removed major lease liability obligations, resulting in a A$137,000 profit from discontinued operations compared to a loss of A$3.8 million.

Administration, marketing & other costs in the quarter were A$5.4 million, compared to A$57.2 million a year ago.

AusGroup said its results for the quarter and half year reflect the performance from its core projects in the Northern Territory and Western Australia oil and gas sector, with profitability returning to more normalised levels following the re-structuring of the business completed in FY2016.

It said it expects the return to profitability to continue through the next half of FY2017 and into FY2018 and FY2019 as its core projects grow in scale and complexity, providing opportunities for organic growth.

Said managing director Eng Chiaw Koon: "There has been a significant milestone in the quarter with the approval from the Federal Minister of the Environment in respect to the Port Melville operations which allows for the business to pursue commercial activities un-encumbered.

"The Oil & Gas environment is still offering many challenges but the approval positions us to be pro-active in determining commercial outcomes advantageous to the success of the business.

He added that the completion of the noteholder consent solicitation exercise last month was also a positive outcome as the extended repayment period had been approved in a very difficult environment.

AusGroup offers a range of integrated service solutions to the energy, industrial and mining sectors across Australia and South East Asia.